LLOYDS Banking Group has rewritten chief executive Eric Daniels’ bonus contract, meaning he will receive up to £2.8m in shares this year.
Daniels will be entitled to as much as 275 per cent of his £1m salary as a long-term bonus, up from 200 per cent last year. Added to his fixed annual reward of £2.3m, the package could bring his total 2010 remuneration to more than £6m.
Daniels passed up his bonus in 2009 amid controversy over bankers’ pay. The decision to up his pay deal reflects improved performance from Lloyds and Royal Bank of Scotland.
Despite recent rises in both banks’ share prices, UK Financial Investments – the agency managing the country’s interest in part-nationalised institutions – is expected to wait until after the general election to revisit exit strategies for its shareholdings.
Lloyds shares closed at 64p on Friday, close to the average price paid by the government for its 41 per cent stake. Shares in RBS, 81 per cent owned by the taxpayer, are also trading near to break-even point at 45.5p.
The boost has led to speculation the government could gradually offload its stake by selling convertible bonds that would exchange into equities after a certain price threshold.
But a sale process is unlikely to begin as soon as this summer, City sources said.